Author
Listed:
- Milenović Jovana
(University of Niš, Faculty of Economics, Republic of Serbia)
- Bonić Ljiljana
(University of Niš, Faculty of Economics, Republic of Serbia)
- Krstić Bojan
(University of Niš, Faculty of Economics, Republic of Serbia)
Abstract
Intellectual capital (IC) contributes to the creation of benefits for companies regarding the generation of competitive advantages, as well as the increase of the economic results (revenue and earnings), economic efficiency (labour productivity and profitability) and the value of company. Total IC consists of two main segments: a) the visible IC, recognised and disclosed on the assets side of balance sheet - intangible assets, and b) the invisible IC, undisclosed on the assets side of balance sheet because it doesn’t fulfil the defined conditions for accounting the recognition and disclosure. As a category in accounting theory, the first segment of total IC is the IC invested in intangible assets. The second segment of total IC is actually the IC itself that is in intellectual capital theory marked as a set of human, structural and relational capital. Starting with the structure of total IC, the aim of this study is the examination of influence of the efficiency of total IC and its elements (visible and invisible) on profitability of companies on the New York Stock Exchange (NYSE). The research is based on the sample of 63 IT companies which are selected according to S&P 500 Information Technology list. The analysis covers the period from 2010 to 2022, and the regression analysis is used for these reasons. Independent variables are following: the efficiency of total IC (EIC),the efficiency of IC which is undisclosed in balanced sheet (E∆IC) and the efficiency in the use of intangible assets (Eia), as well as its elements (the efficiency of goodwill (Eg), the efficiency in use of the intangible assets contained in customer relationships (Ecr), the efficiency in the use of internally generated intangible assets (Eiia), and the efficiency in use of others intangible assets (Eoia). A dependent variable is a profitability of IT companies, which is measured by return on assets (ROA) as a profitability indicator. The research results pointed out that there is a positive, statistically relevant influence of efficiency of EIC and elements of Eia (as independent variables) on a dependent variable – ROA. Conducted research points out the relevance of efficiency of the usage of total IC and all its elements for accomplishing a targeted profitability of IT companies, and, at the same time, confirms the usefulness and validity of the implementation of the EIC methodology (Krstić & Bonić, 2016) in IT companies for the measurement of the efficiency of total IC, as well as its elements.
Suggested Citation
Milenović Jovana & Bonić Ljiljana & Krstić Bojan, 2024.
"Impact of Intellectual Capital Efficiency on Profitability: The Case of Information Technology Companies on the NYSE,"
Economic Themes, Sciendo, vol. 62(3), pages 389-412.
Handle:
RePEc:vrs:ecothe:v:62:y:2024:i:3:p:389-412:n:1007
DOI: 10.2478/ethemes-2024-0021
Download full text from publisher
Corrections
All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vrs:ecothe:v:62:y:2024:i:3:p:389-412:n:1007. See general information about how to correct material in RePEc.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
We have no bibliographic references for this item. You can help adding them by using this form .
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.sciendo.com .
Please note that corrections may take a couple of weeks to filter through
the various RePEc services.